Accountants are being encouraged to improve their knowledge about environmental reporting as companies and public bodies face growing pressure to reduce their carbon footprint.
The climate change bill, which requires the UK to reduce emissions by 80% from 1990 levels by 2050, brings green policies into the corporate mainstream.
To help accountants through the thicket of green regulations and targets the Association of Chartered Certified Accountants has released the second in its series of sustainability briefings.
The guide provides guidance to accountants on dealing with environmental reporting. It includes advice on understanding regulatory and voluntary requirements as well as new legislation, risk management, establishing a framework for measurement of financial and non-financial reporting.
It also covers how to adapt environmental policies into the day-to-day operations of finance departments and how finance staff can provide clear information on the subject to a board of directors.
Steve Priddy, director of technical policy and research at ACCA, said: ‘There is uncertainty and anxiety among our members about carbon, sustainability and green house gas emissions. Our members from around the world have said they want some clarification so they can do their job.’
Later this year, the UK will implement the Carbon Reduction Commitment which requires companies that spend £500,000 or more on its energy bills to pay for their carbon usage prior to using it.
The companies will be ranked in a league table based on how much they cut their carbon consumption. Their position in the table will determine the size of the rebate the companies will receive the following year.
The CRC is expected to have significant implications for company accounts and auditors.
Rachel Jackson, head of social and environmental issues at ACCA, said: ‘Accountants have always needed to adapt to their evolving professional landscape. The next significant development is the emergence of sustainability issues within core business practice.’
The briefings have been published in association with KPMG and Accountability. a global not-for-profit network.
The ACCA?s release of its second series of sustainability briefings should indicate to UK businesses that this increasing pressure for green credentials will create a significant cost for them unless organisations get their asset registers in order.
Assessment of environmental practices and reporting is certainly on the increase for business and generic statements about green strategies ? from procurement to recycling, carbon footprint to flexible working ? will not suffice in the long term: organisations will have to prove their commitment through information transparency and auditable policies.
At the heart of such transparency will be consistent, detailed information about the life cycle of every asset - from country of origin through maintenance schedules to final disposal.
Existing green policies such as the WEEE directive and measuring carbon footprints assume a level of asset management far beyond that achieved by the majority of UK business. How many UK businesses can accurately identify the location of their WEEE equipment within the organisation and confirm when it was purchased and from whom? By linking the asset register to a document management system organisations can create the required audit trail, gaining valuable insight into their own assets and adapting to the ?green economy?.
Group Commercial Manager
Real Asset Management
Posted by: Karen Conneely, 27 Feb 2009 | 00:00
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